Providing security and reliability to international financial operations

Swift supports the countless international financial transactions (collections, payments, foreign trade, treasury, and securities settlements) that are required every day for the development of financial markets, commercial transactions, and investments.

We often use the term SWIFT when referring to international payments, foreign trade, and other related topics. However, it's not common to know what SWIFT is, its structure, who participates in it, and what services it provides.

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication, "a cooperative society created 30 years ago with the objective at that time of automating and making secure all international interbank payments," says Javier Pérez-Tasso, SWIFT director for the Iberian Peninsula.

The network aims to make operations that are: secure, the system authenticates and encrypts messages; integrable and therefore easy to automate; standardized, with predefined fields; reliable, accepted by users; and accessible, easy to use.

SWIFT's shareholders are financial institutions worldwide, organized into National User Groups. SWIFT's cooperative nature means it is governed by its shareholders, who are also users, represented on a Board of Directors composed of 25 members elected based on the number of messages sent by financial institutions in each country.

SWIFT's headquarters are in Brussels, and it has three main operational centers located in Europe, the Americas, and Asia. It employs more than 1.600 people, most of whom are highly specialized IT technicians. SWIFT serves over 7.500 users in 200 countries, handling an average of 9,7 million messages daily, with an estimated value of between €6 and €8 trillion.

SWIFT serves operations in four core markets: Interbank Payments, Securities (Trading, Settlement and Reconciliation), International Trade and Treasury Operations

In recent years there has been a progressive incorporation of local Securities and Payment Clearing Systems into the SWIFT network, which in this way increases the volume of transactions handled and allows for greater efficiency in the financial structures of each country.

SWIFT was built on an X.25 network that is currently being migrated to a private IP network with a global presence to provide greater added value and service quality. This new network, SWIFTNet, is already operational and accessible in Spain and has been used in strategic, real-time systems such as CLS.

Different service lines

SWIFTNet services are currently divided into the following groups: FIN, traditional messaging including collections and payments; INTERACT, access to bank accounts or real-time contracting; FILEACT, bulk sending of files such as pension payments or payroll; and BROWSE, browser services.

Regarding foreign trade services, in addition to the traditional MT XXX messages mentioned in the box, it is necessary to mention Bolero, an initiative of SWIFT and TT Club whose objective is to replace all paper export documents with electronic ones. Its implementation is still limited because the market is not yet mature enough. Currently, the TSAG group has been created with entities from various countries that analyze the needs and implementation challenges to address market demands through Bolero.

While SWIFT, according to Javier Pérez-Tasso, has historically been characterized by its closed access for businesses, "for the past two years, businesses have been able to access SWIFT through a financial institution that creates a closed user group (MACUG). This way, both banks and savings banks, as well as businesses, can benefit from a single infrastructure and a single standard for communicating with each other." Cash management, global treasury management, payment initiation, and funds management are among the new services for businesses that SWIFT now offers.

Javier Pérez-Tasso concludes that “SWIFT’s objective is to continue providing value to our users, that is, greater efficiency with the highest security in national and international financial transactions. The new SWIFTNet network responds to this objective as it can be a single point of contact for national clearing systems, financial institutions, and the companies they serve.”